How India is bracing for Donald Trump’s ‘reciprocal tariffs’ as US plans trade crackdown on ‘all countries’

Asian countries, including India, face tough decisions and uncertainties, as President Donald Trump has announced that he plans to start his reciprocal tariff push with “all countries”, tamping down speculation that he could limit the initial scope of tariffs set to be unveiled April 2.

The tariffs pose a generational challenge to a region whose economies were built around exports to the United States and a world of low trade barriers.

“You’d start with all countries, so let’s see what happens,” Donald Trump told reporters aboard Air Force One. “I haven’t heard a rumour about 15 countries, 10 or 15.”

The US president is set to launch so-called “reciprocal tariffs” on April 2, a centrepiece of his plan to rebalance global trade and boost American manufacturing while collecting tariff payments to fund his domestic policy priorities, including an extension of tax cuts from his first administration and additional tax promises made during the 2024 campaign.

The White House hasn’t yet outlined what tariffs are coming, how they will be calculated, or what countries would need to do to secure coveted exemptions. Trump has also said his tariffs will account for other countries’ non-tariff barriers, though hasn’t detailed how those calculations will be made. The administration also hasn’t specified when these new tariffs will take effect.

“We’re going to be much nicer than they were to us, but it’s substantial money for the country,” Trump said.

What exactly does Donald Trump plan to do?

News agency Reuters reported that Trump wants to announce import taxes, including “reciprocal” tariffs that would match the rates charged by other countries and account for other subsidies.

Trump has talked about taxing India, the European Union, South Korea, and Brazil, among other countries.

How is India preparing for Trump’s reciprocal tariff?

India, unlike China, Canada and the European Union, is actively seeking to appease the Trump administration and is open to cutting tariffs on over half of US imports worth $23 billion, Reuters reported last week.

Negotiations and tariff reductions

India has offered tariff cuts on imports of US farm products such as almonds and cranberries as a further concession to the United States, Reuters reported, citing two government sources.

In a series of meetings in New Delhi with Brendan Lynch, the assistant US trade representative for South and Central Asia, India agreed to cut tariffs on bourbon whiskey and agricultural products such as almonds, walnuts, cranberries, pistachios and lentils, the report added.

Hindustan Times earlier reported that India and the US concluded their first face-to-face trade talks with “significantly positive outcomes” that may secure New Delhi some exemptions from Washington’s planned April 2 retaliatory tariff action.

The four-day discussions, which began on Wednesday and were extended by a day, resulted in both sides agreeing on a broad contour for negotiating a bilateral trade agreement (BTA). The commerce ministry confirmed that the two partners discussed increasing market access and reducing tariff and non-tariff barriers.

Officials familiar with the negotiations pointed to several positive indications from the talks. “Firstly, the bilateral trade negotiation in New Delhi was extended by one more day. Secondly, the two now agreed to enter into the next level of talks through virtual mode. Thirdly, India is the only country engaging with the USA to sign a mutually beneficial BTA, while others like China, Canada, Mexico, Germany and the European Union are resorting to retaliation. And finally, President Trump’s positive reference with regard to India,” said one of these people, requesting anonymity.

They were referring to Trump’s statement made at the White House on Friday. “President Donald Trump described Prime Minister Narendra Modi as a ‘very smart man’ and his ‘great friend’ while emphasising that tariff talks between the US and India would work out very well,” PTI reported on Saturday.

The talks took place in what officials described as “a friendly and cordial atmosphere with shared purpose” to reach an agreement by September this year, in line with the vision set out by the two countries’ leaders.

India has lowered duties for bourbon whiskey to 100% from 150% last month. Import duties range from 30% to 100% on agricultural products such as cranberries, almonds, walnuts, and around 10% on lentils.

Changes in policy

To stay in sync with US trade expectations, India has done away with the 6% “Google tax” on online ads—a levy that had been a hurdle for global tech companies operating without a physical base in the country. Dropping this tax is seen as a step toward easing trade talks and potentially dodging US tariffs, reported Financial Times.

PM Modi’s US visit

On February 13, Prime Minister Narendra Modi and President Donald Trump had resolved to deepen the US-India trade relationship to promote growth that ensures fairness, national security and job creation, with the aim of boosting total bilateral trade from about $200 billion to $500 billion by 2030 (Mission 500).